What Happened to the Piggy Bank?

Diaper changes, sleep sacrifice, missing the fun with co-workers after work, irrational mind wanderings while staring at the ceiling… and so on. But also, random smiles! (usually when they have gas, but we tell ourselves it’s when they hear our voice) And the bills, so much stuff to pay for, before and after birth. There are new mental muscles being formed to make decisions, purchases and child rearing techniques.

Next, with or without noticing, we are molding a human and trying to instill our values. Be good, be kind, get off the screen, please go run around outside, be nice to mom, please stop whining!! They grow like hop vines, seemingly turning calories into body mass before your eyes. The cuteness, oh man, the cuteness. Even though everyone we know doesn’t want to see 77 more photos of the same stuff and hear all the things, we still share. After all, we are all-in, and what else are these cameras in our pockets for?

Suddenly, we have more people in our household. “Dad, can we buy candy?” “Dad, can you buy me a new bike?” “Dad, I’m going to buy us a better house that is like Maya’s house.” It’s adorable, but money is not yet understood. In their mind it’s just the thing (or the word) that gets you all the things.

Cue the nightly parent meeting once the daily bedtime battle has been won: “Honey, let’s get on the same page and teach them about fiscal responsibility.” LOL. “No, for real, let’s talk to them about money. We can also have weekly chores and start giving them allowance. They can divvy it up each week, but at least some must go into the ‘savings’ jar, some into the ‘giving’ jar, and some into the ‘spending’ jar.” “Sounds good, can you run with that?” “Ugh, okay, sure. I’ll get on that, maybe next week.”

Cue the financial planning conversation: “Let’s start contributing to a college account for the kids.” “Sounds good, yes, let’s do that.” “What about that savings account we opened for them at the bank? Is that theirs?” “I mean… yes, that is theirs.” “Okay, then we should start something else for their future, but separate from college savings, right? What should that “something” be?”

You get the idea.

When I’m off parenting duty, and wearing my professional hat I do a lot of talking about kids’ accounts. I’m going to keep this high level, but if you want to nerd out on the specifics, give me a call. You can ask Gemini, Claude, or your agent of choice, of course, but when they give you more than you want to read through in about 3 seconds, give me a call.

Here are some accounts that parents may consider for their children:

• Bank Savings Account
• 529 College Savings Account
• Custodian Roth IRA
• Youth Investment Account
• Uniform Transfers to Minors Act Account (UTMA)
• 530A Account (aka Trump Account)

Are there more? Yes, but let’s be reasonable here. Below is a bit more detail on each. But, if I’m losing you to that red dot on your unread inbox or Sunday (or Monday, or Thursday) Night Football, then let’s chat later. Good night. 😴

Oh, you are still here? Cool, let’s dive in.

Bank Savings Account

These can be worthwhile for every child. Catch-all account for birthday checks from grandparents, depositing their allowance, or that cash for raking the neighbor’s leaves. Do let them spend it, just not all of it. They will eventually start to understand why they should save (for tomorrow, or next week when they want something totally different!). If you are up for it, teach them about interest, better still, about compounding interest!

529 College Savings Account

These are state-run programs designed for education expenses in the future. You put in after-tax money and it gets invested, but all growth in the account is tax free as long as it’s used for “qualified expenses.” What is that? Basically, it’s for college, but it can also be for grad school, but it can also be for K-12 tuition. Yes, it can also pay for supplies and even rent while in school. In the interest of not writing several more paragraphs about “qualified expenses,” let’s just call it “school.”

Custodian Roth IRA

A Roth IRA that an adult opens for their child (or another minor). In order to contribute to the account, the child must have earned income. Yes, even if you are just putting funds in for them, they must have earned income. Contribution rules are the same as for your own Roth IRA, currently limited to the lesser of their earned income or $7,500/yr. If you want to supercharge retirement for them, this is the account, as it can provide decades and decades of tax-free growth. But, with a few exceptions, it’s really for retirement. So don’t put college funds in here!

Youth Investment Account

A brokerage account that a parent must open for their child (generally 13-17-year-olds). In contrast, a regular brokerage account can only be opened by someone who is 18 years old. But what’s cool is that the child can manage the account, including choosing investments. Parent has oversight, but the child can get experience choosing stocks, or maybe bonds (LOL, I know). They can also have a cash balance and even get a debit card to spend from the account. These are great tools to teach teens about investing.

Uniform Transfers to Minors Act Account (UTMA)

The short story is that these are brokerage accounts opened and managed by an adult but that become the child’s when they hit the age of majority (18-25 years old, depending on state and the parents’ election). Transfers to the account are irrevocable, but the parent maintains the right to manage as well as withdraw for certain expenses that are for the child’s benefit until they hit age of majority. There are some tax considerations for the parent with these, but I won’t get into the details here.

530A Account (aka Trump Account)

A newer tax-advantaged account for children. Think of these like an IRA, but no earned income is required for contributions. Contributions are limited to $5K/yr. Parents can also claim a $1K seed contribution from the federal government if their child was born between Jan. 1, 2025, and Dec. 31, 2028. Just in: as of Oct. 1, 2026, the federal government decided it is going to open one of these accounts automatically for every citizen child in the US under the age of 18. Yes, every child. They are already open and parents can claim them (and probably should) HERE. If you want to learn more about these new accounts, check on my colleague’s post about them HERE

Exhausted? Me too, I’ll wrap up.

It’s no small chore to raise a child; hopefully this post helps frame a few financial tools you may use to guide the ‘money’ part of raising your kid. You work hard for that money and it’s natural to want to optimize and grow it as best you can until it’s spent. Be intentional. Want to fund college? Then maybe a 529 account is a great idea. Want to help seed their first home or start a business after school? Then maybe a UTMA account could be suitable. You get the idea.

You made it this far, so you are likely a great parent. You should be proud. Your kid will thank you one day. No, not today. But one day, I promise, they will (maybe). Now I have to get back to parent duty to make sure that lil sis isn’t stealing dollar bills out of big bro’s “giving” jar…